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As the government hopes to save at least £1.2 billion in pension bills, more than 2 million employees in the public sector will feel the consequences. They are now finding out how much more they will have pay in pension contributions as of April next year. The maximum increase is said to be 2.4% however, the number of people who will have to pay extra towards their pension has also increased.

Those who are earning less than £15,000 per year will not be expected to contribute more. For employees earning between £15,000 and £21,000 pension contributions will increase by 0.6% with the exception of teachers whose payments will increase by this same amount up to the higher threshold of £26,000. This of course means that higher earning teachers will have to make up the contributions.

The general secretary of the National Association of Head Teachers, Russell Hobby has spoken out. “The government had made up its mind a long time ago to raid the teachers pension scheme. We now have the privilege of commenting on how efficiently it plans to do so.”

The highest paid teachers are expected to pay no more than 8.8% of their wages in pension contributions if they earn above £112,000 per year as opposed to higher paid staff of the NHS who will be paying a maximum of 10.9% if earning over £110,273.

The government predicts that the extra contributions will result in savings of £530 million from NHS employees, £300 million from teachers and £180 million from those in civil service. In addition, it has been reported that the government are already intending to discuss further increases in pension contributions over the next five years.

About The Author

Lee Murphy

MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.

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